The Downside of Employee Wellness Programs

Sabrina is the editor in chief for TINYpulse news. She's dipped her toes into various works of writing — from retail copywriter to magazine editor. Her work's been featured in Forbes, Bloomberg BNA, and Tech.co.

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Modern offices are investing time and space into gyms, fitness classes, and other activities aimed at promoting health and wellness. But while these things may seem attractive to employees and potential hires, at what cost do they come?

Some studies and experts are showing that employee wellness programs are coming at the expense of company health insurance coverage plans and even at the cost of employees’ health privacy. So while that decked-out, glistening new office gym seems like a perk, it could actually be a downside, depending on how the company sees it.

What Exactly Is an Employee Wellness program?

As part of an effort to reduce overall healthcare costs, companies have looked to boosting its efforts in prevention. This often means subsidizing the costs of gym memberships (or having in-office gyms), sponsoring lectures or programs that discuss ways to stay healthy, offering wellness counseling, or other activities aimed at promoting awareness and avoiding health problems.

Employee benefits consultant Mercer and the National Business Group on Health found these statistics about employee wellness programs:

Employers are spending an average of $693 per employee on incentives for their employee wellness programs in 2015, up from $595 in 2014, and $430 in 2010

Incentives can range from things like gift cards to healthcare contributions to straight cash. Financial incentives sound great on paper.

So What’s Wrong Here for Employees?

Well, let’s look at what they are incentivizing you to do: they encourage employees to join physical fitness activities, participate in biometric screenings, and be assessed for health. First of all, less than half of employees earned their full incentive amount in 2014. Secondly and more importantly, are companies that have this peek into employees’ medical records taking things a step too far? Many say so.

Privacy Issues in Employee Wellness Programs

Many healthcare experts and informed employees don’t want their employers to have access to whether they visit a doctor for a health screening. It’s hard to blame them.

Faculty wellness programs at Penn State University backfired recently for this precise reason, according to San Jose Mercury News. Matthew Woessner, professor of political science at the Harrisburg campus, states:

“They asked about pregnancy, they asked if men were doing testicular exams, they asked about depression, they asked about violence in the home. It was an incredible invasion of privacy.”

A similar issue arose in a lawsuit against CVS Caremark. Employee Robert Watson is suing her employer, which offers a $600 annual premium break for employees who participate in the employee wellness program.

Watson claims that the questions asked extremely personal questions in its health survey — whether its employees are sexually active, for one. Worse, she alleges that a blood test required to earn the incentive was improperly used to categorize employees who were at risk for or suffered from certain conditions. Not only is it an invasion of privacy, but that invasion was allegedly being used to discriminate against its “unhealthy” — i.e. most expensive to cover with insurance — employees.

Think also of the consequences for the chronically ill, those who have congenital illnesses, and employees who are advanced in age. With these types of programs and employer access to certain health information, these workers risk being discriminated against.

Disincentives Can Be Discriminatory

Some employee wellness programs take this potential for discrimination even further — by adding penalties to employees who do not participate in certain health requirements.

In conjunction with incentives for completing fitness activities and health exams, companies are often penalizing employees who do not complete these with a monthly surcharge, larger monthly health insurance premiums, and larger deductibles. These penalties can hit anyone hard, but they are particularly discriminatory toward lower-income employees who more often can’t afford to — or have the spare time to — visit the doctor and frequent the gym. Their sentence? Taking even more money out of their already slim paycheck.

The Issue of Smoking

Because smoking is a health risk — and thus can raise the cost for corporate health insurance coverage — companies have started to punish employees who smoke, even if they do it outside of office time and grounds.

While the American Institute for Cancer Research has tempted employees with a $500 reward for quitting smoking, others choose the opposite path. According to Waller Law, Scotts Miracle-Gro built an anti-smoking policy into its revamped employee wellness program. The company announced the change by giving all its 7,000 employees one year to quit if they are smokers, assisted by company supported addiction counseling and treatment. The new policy, set one year from that date, requires all employees to be randomly tested for nicotine. If they are found to test positive, Scotts Miracle-Gro will fire them.

Policies like these have caused an uproar about companies overextending their authority and having too much say in an employee’s medical history. In addition, anti-smoking action in particular treads dangerous water about being discriminatory. Scotts Miracle-Gro has pulled back its policy after employee complaints and lawsuits.

What is further scaring opponents of evolving employee wellness programs is where the idea could go in the future. Will companies start to require new hires to undergo medical testing? Think of how pregnant women can be discriminated against for jobs because their maternity leave absence could be costly. Then, imagine denying a job candidate because they smoke or live with a congenital illness.

Often work-sponsored insurance programs are the only affordable options for people with illnesses who are still 100% capable of working day to day. The direction these employee wellness programs are going could severely overstretch the company’s reach, making them discriminatory toward all kinds of employees.

Sabrina is the editor in chief for TINYpulse news. She's dipped her toes into various works of writing — from retail copywriter to magazine editor. Her work's been featured in Forbes, Bloomberg BNA, and Tech.co.